No funds appropriated under any provision of this chapter (except as provided in sections
254b[1] and
254b of this title) other than this subchapter may be used—

(1)for grants or contracts for surveys or other activities to determine the feasibility of developing or expanding health maintenance organizations or other entities which provide, directly or indirectly, health services to a defined population on a prepaid basis;

(2)for grants or contracts, or for payments under loan guarantees, for planning projects for the establishment or expansion of such organizations or entities;

(3)for grants or contracts, or for payments under loan guarantees, for projects for the initial development or expansion of such organizations or entities; or

(4)for loans, or for payments under loan guarantees, to assist in meeting the costs of the initial operation after establishment or expansion of such organizations or entities or in meeting the costs of such organizations in acquiring or constructing ambulatory health care facilities.

The reference to section
254b of this title the first place appearing in text was in the original a reference to section
329, meaning section 329 of act July 1, 1944, which was omitted in the general amendment of subpart I (§ 254b et seq.) of part D of this subchapter by Pub. L. 104–299, § 2,Oct. 11, 1996, 110 Stat. 3626.